Economic Savings

In the summer of 2008, gasoline prices reached above $4 per gallon and last year, high prices pushed average household spending on gasoline to nearly $3,000—its highest level ever. Today, prices remain high and volatile, eating into spending on other items and straining already tight budgets.

Vehicles powered by electricity now provide drivers another option. Electricity is generated by a diverse set of primarily domestic energy sources including natural gas, coal, nuclear, hydro, wind, solar, and geothermal, and its price has historically been much more stable than oil. As a result, fuel costs for an electric vehicle are typically around 70 percent lower than those for the average gasoline-powered vehicle. When gasoline prices rise, this comparison becomes even more favorable. For example, at a price of $4 per gallon, a gasoline-powered vehicle that can travel 30 miles per gallon of fuel costs approximately 13 cents per mile. At 12 cents per kilowatt hour, a typical electric vehicle costs approximately 4 cents per mile. Even versus the most efficient gasoline-electric hybrids, fuel costs for electric vehicles are at least 40 percent lower. Electric vehicles also benefit from lower maintenance costs thanks to a combination of regenerative braking (which reduces wear and tear), many fewer moving parts, no fluid replacement, and other features.

Although the upfront costs of electric vehicles are higher than conventional vehicles, these costs are falling, and the combination of lower fuel and maintenance costs, and federal and state incentives, make them an attractive option for many drivers. Consider for example a comparison between the Nissan Leaf and Nissan Versa (although there are some upgrades included, the primary difference between these vehicles is the electric versus gasoline propulsion). The Leaf costs $28,800 and the Versa $16,890, a $12,000 increment. However, once the federal ($7,500) and State of Colorado ($4,500) tax credits are applied, the vehicles cost effectively the same price out of the showroom, meaning that annual fuel cost savings estimated at nearly $900 for drivers traveling an average 12,000 miles are exactly that—savings. Again, the higher average gasoline prices go, the better this and similar calculations become. For more information on tax credits available for plug-in electric vehicles, see Tax Credits.

Sources:
U.S. Department of Energy
U.S. Environmental Protection Agency
Company websites
Colorado.gov